Four Customers in Search of Solutions

IM for Lovelock & Wirtz, Services Marketing 7/e Teaching Notes for Cases - Section 5

CASE 2

FOUR CUSTOMERS IN SEARCH OF SOLUTIONS

OVERVIEW

Four telephone subscribers from the same street in a suburb of Toronto complain individually to BellCanada about a variety of different problems. Is there more to each problem than might appear on the surface? Does it offer Bell a marketing opportunity?

TEACHING OBJECTIVES

• Provoke a discussion of the potential underlying causes of consumer complaints.

• Highlight the fact that complaints are often opportunities in disguise, because they may enable the firm to satisfy the customer by not only resolving the immediate problem, but also selling additional services that provide useful solutions to ongoing needs.

STUDY QUESTIONS

1.Based strictly on the information in the case, how many possibilities do you see to segment the telecommunications market?

2.As a customer service representative at the telephone company, how would you address each of the problems and complaints reported?

3.Do you see any marketing opportunities for BellCanada in any of these complaints?

ANALYSIS

1. Based strictly on the information in the case, how many possibilities do you see to segment the telecommunications market?

The background information for the case already highlights geographic segmentation (all the customers live on the same street in the same suburb of Toronto) and segmentation on socio-economic grounds, because the location is a “middle-class suburb.”

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Copyright © 2009 Christopher H. Lovelock, updated by Jochen Wirtz 2010

Additional segmentation possibilities raised by the case include:

• Value of usage: Winston Chen is in the ninety-eighth percentile of all Canadian household bills—a big spender on telecommunications; Robbins is a relatively heavy user, being at the seventy-fifth percentile; Portillo is average, being at the median level. Finally, Vanderbilt is a low spender, being in the bottom 10 percent of all household subscribers.

• Location of numbers called: International calls are made by Chen to Southeast Asia, by Portillo to Mexico and South America, and by Robbins to the United States. Long-distance calls within Canada are made by Chen and Robbins. Presumably, all four subscribers make local calls.

• Time of calling: Calls are readily identified by time of day and date. We know about Chen and Robbins’ calling patterns, but the phone company would be able to identify dates and times for all charged calls.

• Nature of problems encountered: Chen is concerned about overcharging, Portillo about missed calls, Vanderbilt about obscene calls, and Robbins about poor sound quality.

• Types of services and equipment used: The phone company will have records of what value-added services (e.g., call waiting, caller ID, call forwarding) each customer subscribes to. If the customer has purchased equipment—such as an answering machine or fax—directly from the company, hew or she will know about that, too (some phone companies sell equipment, others don’t). The case tells us only that Portillo subscribes to no value-added services and that Robbins has an answering machine.

2. As a customer service representative, how would you address each of the problems and complaints reported?

An important start is to gain further information about the nature of the problem by asking questions of the customer.

Chen: Is the problem one of charging for calls that were never made? Does he recognize all the phone numbers actually dialed? Alternatively, is he being charged too much for a specific call? Does the length of each call as identified on the bill seem too long? Chen’s complaint may simply be that Bell’s prices are too high. If he says he never made a specific call, then it would probably be best to give him the benefit of the doubt and offer a refund on that call without further argument—unless the record shows that he complains and seeks refunds on a regular basis, in which case there might be grounds for suspecting either a billing malfunction or dishonesty.

Portillo: Is there a particular time of day when the busy signals were received by her callers? Is there anyone else at that address who could have been using her phone at those times? Is there any possibility that the phone instrument was “off the hook” and thus indicating busy? Is there other equipment—such as a fax or computer modem—that could have been operating at the time and thus prevented incoming calls? Depending on the response, different solutions may be appropriate (see the answers to question 3). Because she has no value-added services, she clearly doesn’t subscribe to call waiting service.

Vanderbilt: This problem must be handled with sensitivity and discretion. Mrs. Vanderbilt’s voice may give some clues as to what sort of person she is (e.g., her age, nature of her emotions—frightened, angry, level of self-confidence, etc.). Details of the timing of such calls, any information about the caller’s voice—gender, age, how well-spoken, any identifiable accent—may be helpful, and the nature of what is said (if Vanderbilt is willing to discuss it) may be helpful. There are well-established procedures in most phone companies for dealing with obscene calls, and the customer service representative will need to follow these.

Robbins: Details of what the noises sound like and whether they are encountered all the time may provide some technical clues as to their source. The rep can arrange to have the line tested by an engineer, but might first suggest that Robbins try disconnecting the phone machine to see if that makes any difference (if not, it is probably not the cause).

3.As a marketing manager, do you see any marketing opportunities for BellCanada in any of these complaints?

Chen: There may be special pricing plans that would reduce his phone bill. There may also be discount plans for international calls. One intriguing question is what lies behind the pattern of the phone calls from his home: Who is calling Kingston at lunchtime almost daily and why? Assuming that Chen is away at work, then it must be somebody else. Who is calling Vancouver on the weekends and why (the best guess is that he’s calling a relative)? However, the evening calls to different countries in Southeast Asia might, in fact, be business calls that can’t be made during the daytime because of the time difference.

Portillo: Possible solutions to her problem might include subscribing to call waiting or installing a second phone line. Again, a curious marketer might probe gently to learn more about how she uses phone service. (Is this a home-based business?) Are there other people in the house who are using the line when Ms. Portillo needs to get through? Perhaps, someone failed to return the receiver to its cradle after use?

Vanderbilt: One option is to change her phone number and consider having it unlisted. A second is to install a phone machine to screen calls before she answers. A third is to subscribe to caller ID, which would display the number of the phone from which the incoming call was being made—again, a useful screening device.

Robbins: If the phone machine turned out to be the problem, then BellCanada could offer him a digital messaging service (BellCanada’s service is branded as Answer Message Manager) as an alternative to buying a new machine for the house.

TEACHING SUGGESTIONS

This is a short and simple case that students enjoy because it encourages creative thinking and suggestions for detective work. Just teach it following the sequence of questions presented here.

CONCLUDING COMMENTS

Although not everyone complains about their problems, most large firms do receive a lot of complaints and it’s important to handle them well. A key challenge for the customer service representative charged with complaint handling is to be sure to get the full details and avoid jumping to premature conclusions that might lead to proposing the wrong solution to the problem.

Sometimes, customers can be enlisted to help test possible hypotheses (e.g., the answering machine may not be the cause of the poor connections experienced by Mr. Robbins, so try disconnecting it). On other occasions, the call is more a request for help and advice than a complaint—Ms. Portillo may not be blaming the phone company for her problem of missed calls, just seeking their help in finding a solution.

Finally, complaints may present marketing opportunities. There may be good reasons for the customer to purchase either a different service package or additional features at extra cost. To the extent that the service provider can help the customer obtain better value, they may be glad to pay more or to change their usage behavior.

Further information on BellCanada can be obtained from the company’s Web site:

SEQUEL CASES

If you wish to expand the discussion of the Four Customers case, you can hand out one or more of three short sequel cases, each of which is reproduced following. Permission is granted to reproduce and distribute in class.

The (B) case provides more information about each of the four customers, including the full nature of their telecommunications usage, more background on their problems, and a brief psychological profile of each person.

The (C) case profiles two telephone customer service reps who might be on the line when one of the four customers calls to complain.

The (D) case profiles two field-based service reps who might come to a customer’s residence or workplace to install new equipment or fix problems.

TEACHING NOTES FOR SEQUEL CASES

FOUR CUSTOMERS IN SEARCH OF SOLUTIONS (B)

This supplementary case provides additional information about each of the four customers that was not readily apparent from their initial complaints. Awareness of this information could help the phone company to serve each of these customers better. If this sequel is used on its own (without sequels (C) and (D), the instructor should ask how much of the information could have been obtained by an intelligent customer service rep asking probing questions and how much could be obtained only through a site visit by a field service rep (note Mr. Robbins’ problem with the faulty jack).

Question to ask: Armed with this information, what additional steps might the phone company take to solve these customers’ problems and improve its revenue stream at the same time? Here are some of the more refined solutions that will probably emerge:

Chen

It may be a good idea to offer to help him separate his business calls from his home calls and consolidate the billing of the former to his office number so as to obtain better documentation and also (perhaps) discounts. Perhaps a special plan can then be instituted for frequent personal calls from his home to specific numbers (like his mother-in-law in Kingston and brother in Vancouver).

Portillo

Learning more about Ms Portillo’s situation reveals new opportunities. Because she is self-employed, she may lose a valuable assignment if she misses a call. It would therefore be worth her while to invest money in extra services. Renting a second line (one for her personal use and the other for her sons) with an answering machine or voicemail as an added value service would be a good investment in her case. A distinctive ring tone and/or availability of a cordless phone might solve the problem of failing to hear the phone ring. Because she needs to fax translations to many of her clients, Bell Canada should be able to interest her in purchasing or renting a combined fax/phone instrument—a need that was not immediately apparent from the nature of the initial complaint. Because most of her business clients are probably on the Internet, Bell should examine her current Internet service to see if it might be upgraded to a faster speed.

Vanderbilt

For Mrs. Vanderbilt, the phone is a lifeline, but she is growing afraid of it because of the problem of obscene calls. Learning that her son plays a partial caregiver role might lead a customer service rep to mail Mrs. Vanderbilt some materials about the various alternative solutions that are available and suggest that she discuss these with her son, so that the two of them could jointly select the best option.

Robbins

Only a home visit by a field engineer will allow Bell to determine the precise cause of Mr. Robbins’ problems with his phone. This will have to be done at a time convenient to Mr. Robbins—namely, a Wednesday afternoon. If the customer service rep learns that he shares his house with three fellow students, she or he might wish to suggest opportunities to establish a second line for the tenants or to institute billing procedures that would clarify who incurs which call charges.

FOUR CUSTOMERS IN SEARCH OF SOLUTIONS (C)

This supplementary case provides a brief psychological profile about each of the four customers—knowledge that should influence the best way for a customer service rep or field engineer to deal with each customer in terms of resolving complaints effectively, obtaining additional information, making repairs, offering advice, and selling new services. A well-trained customer service rep with good listening skills might be able to spot behavioral clues from a phone conversation, reflecting both the customer’s tone of voice, phrases used, and reactions to the rep’s own dialogue. A field engineer would have the added advantage of being able to observe body language.

There are two options for using this material. One is simply for students to discuss how knowledge of this information might be useful briefing for a service or field engineer. The second is to invite a few students to engage in some role playing by giving some the (B) and (C) cases and others the (D) case—using the material as suggested on the following page.

Key characteristics to note for each customer:

Chen

Not the easiest person to deal with, especially if he has a grievance. Has a short fuse and doesn’t trust people. Punctuality, accuracy, and (probably) deference will help.

Portillo

Communicates effectively, has high standards, pleasant. Will interact well with anyone competent.

Vanderbilt

Charming but nervous. Will be easy to talk to once she knows who the person is, but is lonely so may waste time on idle chat.

Robbins

His tendency to be arrogant and a bit of a know-it-all may alienate service workers. May not listen well to what others have to say and be too quick to volunteer his opinion. Probably needs to be humored.

FOUR CUSTOMERS IN SEARCH OF SOLUTIONS (D)

This supplementary case provides a brief profile about each of two customer service reps (who deal with customers over the phone) and two field engineers (who visit customers in their homes). The purpose of the exercise is to get students to role play the different customers and employees involved and engage in dialogue to see how attitudes and personality may affect the outcome of an interaction. As instructor, you may wish to ask for volunteers to adopt these roles. For instance, ask “Mr. Chen” to telephone Bell and let “Scott” take the call.

Muriel Picard will almost certainly be able to draw out customers and get to the heart of their needs, because she relates well to customers and inspires confidence. Scott Jennings, by contrast, is likely to rush things too fast and display impatience, thus risking failing to understand customers’ underlying concerns and perhaps alienating them by his manner. This outcome is particularly likely on a day when he has a hangover and is facing personal problems at home.

The field engineers are most likely to visit (1) Mr. Robbins to determine the cause of his bad line and (2) Ms. Portillo to install a second line and fax/phone machine. A clash can be predicted between the technically competent but gruff and rather judgmental Bruce Schmidt and the arrogant Mr. Robbins. By contrast, Andre Lewin has good people skills and enjoys interacting with customers.

Suggestion: All students receive and read the initial case in the book. Students who will be role playing a customer receive the (B) and (C) cases too. Students who will be role playing an employee receive the (D) case but not (B) or (C). After the role playing is completed, students comment on what they observed and what this means for (a) employee selection, (b) employee training, and (c) monitoring of ongoing employee interactions with customers.

EACH OF THE SEQUEL CASES FOLLOWS ON SUBSEQUENT PAGES

FOUR CUSTOMERS IN SEARCH OF SOLUTIONS (B)

ADDITIONAL INFORMATION

Winston Chen, thirty-six, runs a small export-import business. Although he works out of his office in Toronto during the day, he often makes business calls to countries in Southeast Asia from his home telephone in the evening. Chen also calls his brother in Vancouver on a regular basis. His wife, who works part-time in the mornings, loves chatting on the phone and talks at length most days to her widowed mother in Kingston (a smaller city not far from Toronto). Despite grumbling about the amount of his home telephone bill, he has never taken a friend’s advice to inquire about ways of cutting this bill.